Y Combinator Makes Job Cuts to Shift Focus Back to Early Stage Investing

Technology startup accelerator Y Combinator (YC) announced that it will be shifting its focus back to early stage investing and is forced to make some layoffs as a result.

YC’s President and CEO Garry Tan said in a blog that 17 of its team members will be impacted by the decision as the accelerator will no longer need some of the roles on the late stage investing team.

According to a report by TechCrunch, the layoffs following the change in YC’s strategy amount to nearly 20% of its workforce.

Garry Tan

He said,

“YC is rightly known for early stage investing. In recent years, we have also done some late stage investing. But late stage investing turned out to be so different from early stage that we found it to be a distraction from our core mission. So we’re going to decrease the amount of late stage investing we do.”

Garry added that this decision will most likely not have any noticeable effect on the companies that are already in YC’s portfolio moving forward.

While he did not reference the recent banking failures in the memo itself, Garry took to Twitter to lay out the repercussions that it would have on the affected startups.

Calling it an “extinction level event” which will set startups and innovation back by 10 years or more, Garry voiced his concern that 30% of YC companies exposed through the Silicon Valley Bank (SVB) will not be able to make payroll in the next 30 days. This could mean mass furloughs at a time where tech layoffs are at an all time high.

YC currently has over 30 Southeast Asian fintech startups in it portfolio including Indonesian payment unicorn Xendit, Singaporean payments firm Spenmo, neobank Aspire, B2B fintech FAZZ among others.

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• Source: https://fintechnews.sg/70582/funding/y-combinator-makes-job-cuts-to-shift-focus-back-to-early-stage-investing/